An Energy and Natural Resources Court for Scotland?

Pages419-424
Author
DOI10.3366/elr.2015.0306
Date01 September 2015
Published date01 September 2015
LORD PRESIDENT GILL'S ANNOUNCEMENT

Lord President Gill addressed the Holyrood Digital Justice Conference on 28 January 2015.1

The Lord President's speech is available to download from http://www.scotland-judiciary.org.uk/26/1368/Lord-Presidents-speech-at-the-Holyrood-Digital-Justice-Conference .

His speech contained much of interest, but perhaps its most striking feature was the announcement of the launch of a feasibility study into the creation of an Energy and Natural Resources Court in the Court of Session. This was notable not only for the innovative nature of the proposal, but also for the stirring language in which it was made. English lawyers have become accustomed to hearing senior members of the judiciary extolling the virtues of the English system of commercial law and of the English courts as a destination of choice for international commercial litigation.2

See e.g. Lord Irvine of Lairg, “The law: an engine for trade” (2001) 64 MLR 333.

By comparison, the Scottish judiciary has tended to be more reticent. However, no light was being hidden under any bushels when the Lord President said:3

See Lord Gill (n 1) at 11.

Our legal system should be a driver for economic progress in Scotland. Our courts and our judges can and should contribute to the prosperity of our country. We can do that if, by the excellence of our judges, and our legal profession and the efficiency of our courts, we make Scotland a forum of litigation that not only retains litigants that at present go elsewhere but also becomes a forum of choice for litigations from abroad.

Lord Gill noted with sadness that Scottish judges and lawyers of the 1960s and 1970s were not alert to the opportunity that Scotland could be an international forum for resolving disputes in the oil and gas industry. He was keen to ensure that no similar mistake was made in relation to renewables or other natural resources. He applauded Lord Penrose's success in creating a well-regarded specialist Commercial Court; in announcing the feasibility study, he stated that he wished to build upon that achievement. Finally, “in keeping with [the] view that courts must serve the litigant” ,4

Ibid at 12.

he proposed that if such a court should be established, it should sit outside of Edinburgh if the need arose
COMMENTARY

So far as the failure to capture oil industry business is concerned, Lord Gill may have directed his criticism towards the wrong generation of Scots judges and lawyers. In the early days of the industry it was not unusual for drilling or oilfield service contracts to be written under Scots law.5

Oil and gas companies generally conduct exploration and production activities under the aegis of unincorporated joint ventures constituted and governed by Joint Operating Agreements (“JOA”). In the UK continental shelf these documents are now invariably written under English law. I am not aware of any early JOAs having been written under Scots law, although I have not researched this in detail.

A number of such contracts were litigated in the Scottish courts and the Scottish judges generally acquitted themselves well in dealing with these cases. In Nelson v Atlantic Power and Gas Ltd,6

1995 SLT 102.

for instance, the court recognised the significance of the reciprocal nature of the indemnity arrangements under discussion. The court's insight into the commercial purpose of the parties' overall risk allocation scheme was one of the factors which led it to (it is submitted, correctly) uphold and enforce the contractual indemnity.7

Similarly sound judgment was exercised by the Inner...

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